If an employee wants (or needs) an extended leave of absence, their employer might agree to a sabbatical.

What is a sabbatical?

A sabbatical is a break from work which is agreed with the employer for a defined period of time. Paid sabbatical leave is rare, though it could be offered at the discretion of the employer. This is usually the case for academics who are taking a break from their usual role to pursue an area of research.

A sabbatical shouldn’t be confused with holiday entitlement or sick leave, though an employee may wish to use their accrued holiday leave at first.

What is the purpose of a sabbatical?

There’s an entire planet to explore, new ideas to work on, and discoveries to be made. An extended sabbatical enables staff to pursue other interests or to reflect whilst away from the work environment.

Employees are likely to return feeling rested and rejuvenated, and hopefully with plenty to inspire them. And really, the appeal of a sabbatical is the promise of returning to stable employment afterwards; taking an unpaid break from work is a lot less scary if the job is still there to go back to.

It’s not all about supporting employees though. Being approachable on the subject of prolonged personal absences has benefits for employers, too. A member of the team being away for an agreed length of time is probably preferable to losing valuable knowledge and experience from the business altogether.

How does taking sabbatical leave work on payroll?

During a sabbatical an employee is still just that – an employee. Staff taking a prolonged leave of absence should still be included on payroll processing and PAYE submissions, even if their pay is zero for that payroll period. Just remember to change the salary amount, both when they finish to avoid over payments, and when they return to avoid frayed tempers!

Sabbatical leave and PAYE deductions.

Permanent employees usually have their tax deductions worked out on the expectation of working for the full tax year. By taking unpaid leave during the tax year, they might not have to pay as much tax as originally thought. This can mean they’re due a refund on the tax they’ve already paid.

The overpayment can be dealt with either as:

• A lump-sum refund through the employer.
• A tax code adjustment so that the employee pays slightly less tax the following year, to balance out the overpayment.

Overpayments can only be repaid once the tax year has finished though!

If the employee decides not to come back (and yes that’s always a possibility) then obviously refunds can’t be processed through the employer. In that case, the employee will need to request a refund through their Personal Tax Account (PTA).

If you have questions about this or other payroll procedures, talk to a member of our team to learn more – call 020 3355 4047 or press the Live Chat button on screen.

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About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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